China Commits to Address U.S. Trade Concerns During Recent JCCT Meeting

Direct U.S. Access to China Market

China agreed to accelerate the steps necessary to allow U.S. companies to import, export, distribute, and sell their products in China without going through local state trading companies - giving them full control of their supply chains. Specifically, China has committed to (partial list):

implement its World Trade Organization (WTO) trading rights obligations by July 1, 2004 (six months ahead of schedule) and publish draft implementing regulations on trading rights for public comment by June 1, 2004. Once these rights are in effect, U.S. companies will be free to ship U.S. products into China without using local middlemen;

provide distribution rights to U.S. companies in China on schedule by the end of 2004 (draft implementing regulations for which were published on April 16, 2004). This will allow U.S. firms to engage in wholesaling and retailing of U.S. products directly within China, as well as providing related services; and

open its market for American shipping through the exchange of diplomatic notes for the U.S.-China bilateral Agreement on Maritime Transportation (AMT) which, among other things, allows U.S. carriers to open full branches in China and operate without restrictions.

(Although the U.S. and China signed the AMT on December 8, 2003, diplomatic notes implementing the agreement were not exchanged until the April 21, 2004 JCCT meeting. See ITT's Online Archives or 12/11/03 and 12/12/03 news, 03121105 and 03121215, for BP summaries on the AMT. See ITT's Online Archives or 04/05/04 news, 04040510, for BP summary of Federal Maritime Commission (FMC) notice requesting comments on the AMT, etc.)

Wireless Computer Networks and Mobile Phones

China announced steps toward a market-based and technology neutral approach to the development of next generation wireless standards for computers and mobile phones, including (partial list):

suspending indefinitely its proposed implementation of WAPI as a mandatory encryption standard for wireless computer networks and working to revise this standard, taking into account comments received from Chinese and foreign firms; and

supporting technology neutrality with respect to the adoption of third generation (3G) telecommunications standards for mobile phones and allowing Chinese telecommunications service providers to make their own choices as to which standard to adopt.

China's Action Plan for Intellectual Property

China presented an action plan designed to address the piracy and counterfeiting of U.S. ideas and innovations under which it committed to (partial list):

conduct nationwide enforcement actions against piracy and counterfeiting - stopping the production, sale, and trade of infringing products and punishing violators;

apply criminal sanctions to the import, export, storage, and distribution of pirated and counterfeit products;

increase customs enforcement action against the import and export of infringing products and making it easier for rights-holders to secure effective enforcement at the border; and

ratify and implement the World Intellectual Property Organization (WIPO) Internet Treaties as soon as possible.

Further Opening of China's Market for Soybeans, Wheat, Cotton, Corn, Etc.

China agreed to implement new transparency procedures and issue product approvals that will further open its markets for U.S. agricultural products. Specifically, China will (partial list):

issue final safety certificates for U.S. biotech soybeans; and

make it easier to export U.S. wheat, cotton, corn, and other products subject to tariff rate quotas to China by providing the names of its domestic quota holders to U.S. exporters upon request.

End-Use Visits for U.S. Exports of Dual-Use Items to China

The U.S. and China reached an agreement on procedures to strengthen end-use visit cooperation and help ensure that U.S. exports of controlled dual-use items are being used by their intended recipients for their intended purposes. The resolution of this long-standing issue will allow for increased U.S. exports to China of high technology items subject to appropriate safeguards.

Dialog on Textiles and Apparel Trade

In order to begin addressing the many difficult issues that affect the U.S.-China relationship in the textile and apparel sector, the U.S. and China have agreed to reinforce their existing dialog on textile trade. The U.S.-China discussions addressed a variety of issues, including possible scenarios for the bilateral textile trade relationship when quotas are eliminated at the end of 2004.

Also, in January and March 2004 the U.S. and China held consultations on the safeguard quotas imposed by the U.S. on China cat 222 (cotton/man-made fiber (MMF) knit fabric), cat 349/649 (cotton/MMF brassieres and other body supporting garments), and cat 350/650 (cotton/MMF dressing gowns and robes) for the December 24, 2003-December 23, 2004 period, but no further consultations have been scheduled. (See ITT's Online Archives or 01/22/04 news, 04012210, for most recent BP summary on these safeguard quotas.)

(The JCCT was established in 1983 as a forum for high-level dialogue on bilateral trade issues and a vehicle for promoting commercial relations. The JCCT works to resolve problems affecting U.S. companies and serves as an umbrella for trade events and WTO technical assistance programs.)

USTR fact sheet on the recent JCCT meeting (dated 04/21/04) available at

http://www.ustr.gov/regions/china-hk-mongolia-taiwan/2004-04-21-factsheet-china-jcct.pdf.

Commerce Department notice (dated 04/22/04) available at

http://www.commerce.gov/opa/press/2004_Releases/April/21_DOC_US-ChinaJCCT_Outcomes.htm.